Congress announces March 29 hearing into failures of SVB and Signature Bank

Rep­re­sen­ta­tives from the Fed­er­al Deposit Insur­ance Cor­po­ra­tion and Fed­er­al Reserve will be tes­ti­fy­ing before the Unit­ed States House Finan­cial Ser­vices Com­mis­sion in a new­ly announced hear­ing inves­ti­gat­ing the col­lapse of two major banks.

In a March 17 notice, Rep­re­sen­ta­tives Max­ine Waters and Patrick McHen­ry — rank­ing mem­ber and chair of the com­mit­tee, respec­tive­ly — said U.S. law­mak­ers would lis­ten to tes­ti­mo­ny from fed­er­al finan­cial reg­u­la­tors “in response to the fail­ures of Sil­i­con Val­ley Bank and Sig­na­ture Bank” in a March 29 hear­ing. FDIC chair Mar­tin Gru­en­berg and Fed vice chair for super­vi­sion Michael Barr are expect­ed to appear before Congress. 

“The House Finan­cial Ser­vices Com­mit­tee is com­mit­ted to get­ting to the bot­tom of the fail­ures of Sil­i­con Val­ley Bank and Sig­na­ture Bank,” said Waters and McHen­ry. “This hear­ing will allow us to begin to under­stand why and how these banks failed.”

#NEW: Chair­man @PatrickMcHenry and Rank­ing Mem­ber @RepMaxineWaters announce a bipar­ti­san hear­ing with fed­er­al finan­cial reg­u­la­tors in response to the fail­ures of #SVB and Sig­na­ture Bank to be held on March 29, 2023.

Read the full release https://t.co/UFEpzBzJLX pic.twitter.com/0cqWkHE2K3

— Finan­cial Ser­vices GOP (@FinancialCmte) March 17, 2023

On March 10, Sil­i­con Val­ley Bank shut­tered fol­low­ing a bank run among major depos­i­tors, but the gov­ern­ment stepped in to announce most unin­sured depos­i­tors — those with more than $250,000 — would be cov­ered. In con­trast, reports sug­gest­ed Sig­na­ture Bank had no issues with sol­ven­cy at the time of its clo­sure on March 12, but New York reg­u­la­tors stepped in, giv­ing the FDIC con­trol of the firm’s insur­ance process. 

Barr will be releas­ing a report on the Fed’s super­vi­sion and reg­u­la­tion of Sil­i­con Val­ley Bank. The Depart­ment of Jus­tice and Secu­ri­ties and Exchange Com­mis­sion have also report­ed­ly announced their own probes into some of the bank’s exec­u­tives sell­ing stock in the weeks lead­ing up to the closure.

Relat­ed: US law­mak­er sug­gests Signature’s col­lapse was tied to insta­bil­i­ty of crypto

Some law­mak­ers have point­ed to expo­sure to cryp­to firms as poten­tial cul­prits in the down­fall of the banks, while advo­cates in the space have argued that gov­ern­ment offi­cials were look­ing to “de-bank” cryp­to and blockchain com­pa­nies. Accord­ing to the House Finan­cial Ser­vices Com­mit­tee, it expects to hold mul­ti­ple hear­ings on the issue.